This wasn't supposed to happen. Some people thought it couldn't happen. Lehman Brothers couldn't be another Bear Stearns because the Fed had extended a novel credit window to it (and other investment banks). That meant, we all thought, that "failure" wasn't an option. But boy is it. CDS spreads on Lehman bonds are even wider now than Bear spreads were just before it died. There is less rumor-mongering this time around. But in most respects, we're seeing a repeat. The most ominous sign is that the Treasury and the Fed are involved in efforts to facilitate a buyer. They might not necessarily be driving the process, but any buyers want the same assurances JPMorgan got with its Bear deal. We'll likely get an effective take-under sometime soon. Goldman Sachs is apparently out of the running. Bank of America is surprisingly--very!--said to be in the running.

For more:
- here's an AP backgrounder

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